Highest Commercial Tax Rates in Texas by County

Texas does not have a state income tax. That single fact shapes everything about how the state funds public services — and it puts an outsized burden squarely on the shoulders of property owners. For commercial property owners, the consequences are stark: Texas consistently ranks among the highest property-tax states in the country, and the variation between counties means that where your property sits can determine whether your annual tax bill is a manageable operating expense or a line item that threatens your entire investment thesis.

This guide breaks down which Texas counties impose the highest effective commercial property tax rates, explains why those rates are so high, and lays out what commercial property owners in high-rate counties can do to fight back against overassessment — the compounding factor that turns a high tax rate into an even higher tax bill.

The Overassessment Problem Behind High Tax Rate Counties

Before looking at the numbers, it is critical to understand why high tax rates alone do not tell the full story. Your property tax bill is a function of two variables: the tax rate and the assessed value. A county with a 2.8% combined tax rate and an accurate assessed value will cost you less than a county with a 2.4% rate and a 25% overassessment.

This is the core problem for commercial property owners in Texas. Appraisal districts in high-rate counties are not somehow more careful with their valuations than districts in low-rate counties. In fact, the opposite is often true. Counties with higher rates tend to be those with larger, more complex commercial property bases — and mass appraisal techniques break down at scale when applied to diverse property types with varying income profiles, physical conditions, and market dynamics.

Under Texas Property Tax Code §23.01, appraisal districts must establish market value — the price a property would sell for in an arms-length transaction. But the practical reality is that mass appraisal cannot account for the specific vacancy rate in your building, the below-market leases your tenants signed during a downturn, or the functional obsolescence that makes your 1990s office layout uncompetitive with newer buildings. These gaps between appraised value and actual market value are systematic, and they hit hardest in counties where the tax rate magnifies every dollar of overassessment.

Which Texas Counties Have the Highest Commercial Property Tax Rates

Texas has 254 counties, and combined tax rates for commercial properties vary enormously — from under 1.5% in some rural West Texas counties to over 3.0% in parts of the major metro areas. The combined rate includes overlapping levies from the county, city, school district, community college, hospital district, and any special districts like municipal utility districts or emergency services districts.

The counties with the highest effective commercial property tax rates tend to cluster in a few categories:

Major metro counties with multiple overlapping taxing jurisdictions. Fort Bend County, Harris County, and Tarrant County all have areas where the combined rate exceeds 2.8%. In Harris County — home to Houston and the largest commercial property base in the state — certain locations within Houston ISD boundaries face combined rates approaching 3.0% or higher when all taxing entities are stacked. Tarrant County properties within Fort Worth city limits and certain school districts can see similarly elevated rates.

Suburban counties with rapid growth and heavy infrastructure spending. Counties like Collin County, Williamson County, and Denton County have seen explosive commercial development, but the infrastructure demands of growth — roads, schools, emergency services — drive tax rates upward. New development may eventually broaden the tax base enough to moderate rates, but in the near term, commercial property owners bear the cost.

Mid-size metro counties with limited commercial tax base. Counties like Bexar County (San Antonio), McLennan County (Waco), and Lubbock County have rates in the 2.4% to 2.8% range. The commercial property base is smaller than in Houston or Dallas, which means each property bears a proportionally larger share of the total tax burden.

East Texas counties with high school district rates. Several East Texas counties including Gregg, Smith, and Angelina counties combine moderate county rates with high school district levies, pushing combined rates into the 2.2% to 2.8% range. The school district component alone often exceeds 1.3% to 1.5%.

The Math That Makes Overassessment So Expensive in High-Rate Counties

Consider two commercial properties with identical true market values of $3 million:

Property A sits in a county with a 1.8% combined tax rate and is assessed accurately at $3 million. Annual tax bill: $54,000.

Property B sits in a county with a 2.8% combined tax rate and is overassessed at $3.6 million — a 20% overassessment, which is not unusual for commercial properties that have not been protested. Annual tax bill: $100,800.

Property B pays $46,800 more per year than Property A — and $16,800 of that difference is purely attributable to the overassessment, not the higher rate. Over a five-year hold period, that overassessment alone costs $84,000. Over ten years, $168,000.

The relationship between tax rates and overassessment is multiplicative, not additive. A 20% overassessment in a 1.8% county costs you $10,800 per year in excess taxes. That same 20% overassessment in a 2.8% county costs $16,800 — 55% more — even though the degree of overassessment is identical. This is why protesting your assessed value is most valuable in exactly those counties where rates are highest.

For a deeper explanation of how these rates are calculated, see our guide on how property tax rates are calculated.

How Texas Appraisal Districts Systematically Overvalue Commercial Property

The overassessment patterns in high-rate counties are not random. They follow predictable patterns tied to how appraisal districts apply mass valuation techniques:

Income approach distortions. Most commercial properties in Texas are valued using the income approach under Tax Code §23.012 and §23.01. The district estimates net operating income and capitalizes it at a rate intended to reflect market returns. Three systematic errors occur frequently: the district assumes higher rents than the property actually commands, applies vacancy rates lower than the property’s actual occupancy experience, and uses capitalization rates that are too low for the property’s risk profile. Each error individually pushes the value up; when all three compound, the result can be a 15% to 30% overassessment.

Stale comparable sales. In the sales comparison approach, districts sometimes rely on transactions that are 12 to 24 months old or from stronger submarkets. Commercial real estate markets can shift meaningfully in a single quarter — a sale from mid-2024 may not reflect mid-2026 conditions at all.

Failure to account for functional obsolescence. The cost approach — which estimates replacement cost minus depreciation — systematically overvalues older commercial properties. A 1980s office building with an outdated floor plate, insufficient parking, and aging mechanical systems does not carry the same value as a modern building, but the cost approach often fails to deduct adequately for these deficiencies.

Ignoring property-specific conditions. Mass appraisal by definition cannot account for the specific conditions affecting your property — deferred maintenance, environmental issues, easement encumbrances, or access problems. These conditions reduce market value but are invisible to the district’s models.

County-by-County Rate Ranges for Texas Commercial Property

While specific rates change annually as taxing entities adopt new budgets, the following ranges represent typical combined commercial property tax rates by county type:

Urban core counties (Harris, Dallas, Tarrant, Bexar, Travis): 2.2% to 3.2%, depending on city and school district jurisdiction. Properties inside city limits with high-rate school districts face the upper end. Properties in unincorporated areas or with lower-rate school districts fall toward the lower end.

Suburban growth counties (Collin, Denton, Williamson, Fort Bend, Montgomery): 2.3% to 2.9%. Rapid growth drives infrastructure spending that keeps rates elevated even as the tax base expands.

Mid-size metro counties (McLennan, Lubbock, Smith, Nueces, Ector): 2.0% to 2.7%. Rates vary significantly depending on city incorporation and school district boundaries.

Rural counties: 1.5% to 2.2%. Lower rates reflect smaller government budgets, but commercial properties are rarer and may receive less appraisal district scrutiny — or conversely, may be poorly understood by districts with limited commercial valuation expertise.

Border counties (Cameron County, Hidalgo, Webb, El Paso): 2.0% to 2.8%. These counties combine moderate base rates with additional levies for border infrastructure and healthcare.

It is worth noting that the Texas Comptroller’s property tax assistance division publishes rate data annually, and the voter-approval rate system established under Senate Bill 2 (2019) constrains how quickly rates can increase without voter approval. However, assessed values are not subject to the same constraints — which is precisely why protesting your value is the most effective lever available to commercial property owners.

The Filing Deadline and the Protest Window

Regardless of which county your property is in, the statutory deadline to file a Notice of Protest is May 15 or 30 days after the appraisal district mails your notice, whichever is later (Tax Code §41.44). For most commercial property owners, the effective deadline is May 15.

Missing this deadline means accepting whatever value the district assigned — and paying taxes on it for the full year. There is no retroactive protest mechanism. If you miss the window, you wait until next year.

The protest is filed on Form 50-132, and you can select two grounds that are particularly relevant for commercial properties:

Market value is excessive (§41.41(a)(1)) — the appraised value exceeds what the property would sell for on the open market. This is the most common and generally most effective basis for commercial protests.

Unequal appraisal (§41.41(a)(2)) — the property is appraised at a higher percentage of market value than comparable properties. This equity argument is especially powerful in high-rate counties where the district may have valued similar properties inconsistently.

For a complete walkthrough of the protest process, see our guide to protesting commercial property tax in Texas.

What the Appraisal Review Board Process Looks Like in High-Rate Counties

After filing your protest, the process follows the same statutory framework regardless of county, but the practical experience varies significantly:

In large metro counties like Harris and Dallas, the ARB process is heavily structured. Informal hearings with district staff are the first step, and a significant percentage of commercial protests settle at this stage — particularly when the property owner presents credible income data and comparable sales. If the informal hearing does not produce an acceptable settlement, the case moves to a formal ARB panel hearing. In Harris County, the ARB handles tens of thousands of protests annually, and the panels are experienced with commercial valuation arguments.

In mid-size counties, the process is similar but the ARB panels may have less exposure to complex commercial valuation issues. This can work in your favor if you present a well-organized evidence package — the panel may give more weight to clear, professional presentations because they see fewer of them.

In smaller counties, the ARB may consist of local appointees who are more familiar with residential than commercial values. Presenting commercial income data, cap rate analysis, and equity comparisons in an accessible format is particularly important in these settings.

Across all counties, the ARB is required to base its decision on the evidence presented. Showing up with a professional evidence package — income analysis, comparable sales, equity data, and property condition documentation — dramatically increases the likelihood of a meaningful reduction.

Why Commercial Property Owners in High-Rate Counties Cannot Afford to Skip the Protest

The economics are unambiguous. In a county with a 2.5% combined tax rate, every $100,000 of overassessment costs you $2,500 per year. A $500,000 overassessment — which is common on commercial properties valued at $2 million or more — costs $12,500 annually. Over five years, that is $62,500 in taxes you did not owe.

At LowerMyCommercialTax.com, we work on a contingency basis: 30% of first-year tax savings, and nothing if we do not reduce your assessed value. For property owners in high-rate counties, this model means the math almost always works in your favor. If we achieve a $200,000 reduction on a property in a 2.5% county, your first-year savings is $5,000 and our fee is $1,500 — leaving you $3,500 ahead in year one and $5,000 ahead in every subsequent year the reduction holds.

The properties that benefit most from professional protest representation are exactly those in the highest-rate counties: Harris County, Dallas County, Tarrant County, Travis County, and Bexar County. But the principle applies to every county in Texas where commercial property is overassessed.

If you have not protested your commercial property’s assessed value this year, you are almost certainly paying more than you should. The May 15 deadline is the hard cutoff. Review your notice, compare it to what your property would actually sell for, and take action before the window closes.

For county-specific guidance, visit our pages on Ellis County, Collin County, or Bastrop County commercial property tax protests.

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About the Author

Mike VanVickle is the founder of LowerMyCommercialTax.com, helping Texas commercial property owners reduce their tax burden through professional protest representation. With deep expertise in Texas property tax law and appraisal district processes, Mike and his team have helped property owners across all 254 Texas counties achieve meaningful reductions on a contingency basis — no savings, no fee.

Sources & References

• Texas Comptroller of Public Accounts — Property Tax System Basics
• Texas Comptroller of Public Accounts — Property Tax Rates by County
• Texas Property Tax Code, Title 1, Subtitle D — Tax Code §41.41
• Texas Property Tax Code — Tax Code §23.01: Appraisals Generally
• Texas Property Tax Code — Tax Code §41.44: Notice of Protest
• Texas Taxpayers and Research Association — Annual Property Tax Report

This guide was last reviewed and updated on May 15, 2026. Tax rates, deadlines, and procedures are subject to change. Consult your county appraisal district for the most current information.